Amway is foundering and fighting for its life. New upstarts are challenging it, riding on the political and legal highway that Amway paved. Though Amway is huge, it also is hugely vulnerable, a house of cards.
The newly challenging MLMs use all the tricks that Amway taught them and they play off against Amway’s long rap sheet of lawsuits, bad publicity, regulatory fines and its long trail of “quitters and losers.” This gives the new schemes the chance to claim they are “better” or “different”, and really do offer an income opportunity.
The new schemes also enjoy the unregulated legal environment that Amway paid for. No worries about the FTC in America where Amway is based. After pouring millions into the coffers of the Republican Party, Amway got President Bush to appoint an Amway attorney as FTC chairman. The agency was put on a chain and immediately stopped enforcing the law against “pyramid selling schemes.” Amway was safe for a time, but it also opened the inferno’s gates for new MLMs to devour Amway’s base.
The newest upstart, called Monavie, achieved a billion in sales and a million followers in less than three years. It sells fruit juice that is priced higher than a bottle of fine French wine. Blatantly deceptive claims and promises about this juice curing arthritis and preventing cancer are all over the internet and are routinely made by Monavie’s “independent” salespeople. Much of Monavie’s “sales” were taken right out of the revenue/recruitment base of Amway and its old protégé, Herbalife. Amway has sued Monavie and is trying desperately to stop the hemorrhaging of recruits.
But, it is not Monavie that is causing Amway’s collapse. As an upcoming False Profits Blog will reveal, Monavie offers nothing more than Amway. It is not “different” or “better.” It is the same. The same false promises of income based on endless chain recruiting. The same promotions of ridiculously overpriced, over-hyped products that most new recruits stop using within a year but buy for a few months while they still believe in the false income promises.
Monavie is causing the very same financial losses to 99% of its recruits that Amway has perpetrated for decades. It is using the same book of deceptions honed to perfection by Amway, and Monavie is structured exactly like Amway. It has even imported Amway’s Top Gun recruiters, the very same tricksters that publicly admitted in a lawsuit that they were running the notorious “tools” scam at Amway.
No, Amway’s apocalypse has been a long time coming and is of its own doing. For about 25 years, Amway has been on a pyramid recruitment rampage all over the globe, escaping saturation levels in older markets by opening new ones. The truth is finally catching up with Amway. Saturation time has arrived.
Eventually, the recruitment spree (70% quit each year, 99% lose money) led Amway to the last and largest market on earth for pyramid exploitation, China. But Amway’s reputation had preceded it. China enacted a new law in 2005 that that bans Amway’s keystone pyramid pay plan.
And some of Amway oldest markets, the USA and England, are now showing extreme distress. In England, Amway is being prosecuted for fraud. English regulators are trying to kick Amway out of that country, crippling it in Europe. Already, Amway has been ordered to drastically reduce prices, ban its “tools” scheme and clearly disclose the reality of enormous loss rates suffered by its hapless recruits.
In the US, some of Amway’s top insiders have become whistle blowers, revealing that less than 5% of Amway products are ever retailed; its products are “hopelessly overpriced”; that it is impossible for a new recruit to be profitable; and that within a few years, Amway churns nearly 100% of its entire “sales” base. The insiders themselves charge that Amway is operating illegally.
These charges are mirrored in an important class action lawsuit brought in US courts by the law firm, Boies, Schiller and Flexner (which represented Al Gore to the Supreme Court). This firm has the expertise and the resources to sustain a potentially devastating financial attack on Amway. The case has overcome Amway’s main legal defense – that Amway recruits are not entitled to a day in court because they agreed, when they signed Amway’s contract, to submit themselves to Amway’s own “arbitration” system. The judge termed the Amway contract “unconscionable.”
Perhaps the most obvious sign that Amway’s Judgment Day is at hand is Amway’s recent media advertising. Amway ads are now running on the Keith Olbermann show on MSNBC and on CNN and in magazines. These strange new ads pretend that Amway is a common household name, associated with products, like Tupperware is, and not with a massive financial scam, besieged by lawsuits and whistle-blowers.
Actually, the Amway name is so ruined by widespread association with pyramid scam that Amway tried to replace it in North America with the “Quixtar” name.
The name change trick did not work. Now, Amway is trying to resurrect, redefine and polish up its defiled name with deceptive advertising. The ads vaguely refer to the Amway “opportunity.” Yet, just like the old tactic that became Amway’s infamous trademark – inviting people to a social event without telling them it’s actually a high pressure Amway recruitment meeting – the media ads dare not describe the “opportunity”. 99% of all who try it, lose their shirts!
The ads are clear signals of market distress. In the end, the Amway ads are an effort to uphold a crumbling house of cards.